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Security concerns of banking IT systems should be guarded

Financial Express
Banking Bureau , Sept 22, 2006

There have been numerous instances of security breaches and the consequent perpetuation of frauds in the domestic banking industry. Reserve Bank deputy governor V Leeladhar said the entire chain of procedures and components of an IT system have to be looked at in a holistic manner to ensure that security is all pervasive. He also pointed out the need for standardisation of procedures to ensure inter-operability is provided for.

Leeladhar said banks need to take up straight through processing and inter-operability as key issues to be addressed in all their technological implementations. He also guided the banks to consider the the power of the chip in the mobile phone and use it for extending secure banking transactions to customers.

Meanwhile, in a step towards financial inclusion, Institute for Development and Research in Banking Technology (IDRBT) announced at Banknet India’s second international Bank Tech summit that it plans carry out a pilot project rolling out biometric smart cards in the next six weeks, in collaboration with IIT Bombay.

Arvind Sharma, member secretary, governing council and director, IDRBT, said, “To begin with, this project would be rolled out in the North-Eastern region of the country and later it would be extended to other parts. All kinds of government payments like pension, welfare payments of the government would be channelised through this common infrastructure which is expected to cut down the cost of delivery of these services.”

He further added that these cards would also enable to load subsidies granted under public distribution system. These prepaid biometric smart cards, while serving as a national identification card, is also expected to serve as a centralised core banking system, thereby facilitating the purpose of a rural credit bureau.

Currently, SBI, Andhra Bank, ICICI Bank, HDFC Bank and UBI have agreed to participate in this project. The average cost of each card is expected to be Rs 50-55. Sharma is targeting close to 20,000 accounts under these biometric smart cards by December.

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